Decision Date: 11/09/95 Archive Date:
11/11/95
DOCKET NO. 92-10 041 ) DATE
)
)
On appeal from the
Department of Veterans Affairs Regional Office in Portland,
Oregon
THE ISSUE
Entitlement to waiver of the recovery of an overpayment of
disability compensation benefits, in the calculated amount
of $3,064, to include the issue of whether the overpayment
was due to sole administrative error by the Department of
Veterans Affairs (VA).
REPRESENTATION
Appellant represented by: Disabled American Veterans
ATTORNEY FOR THE BOARD
Suzie St. Vil, Associate Counsel
INTRODUCTION
The veteran served on active duty from July 1955 to July
1958 and from October 1958 to June 1976. He has been
represented throughout his appeal by the Disabled American
Veterans.
This matter came before the Board of Veterans' Appeals
(hereinafter Board) on appeal from a decision of December
1991, by the Committee on Waivers and Compromises
(Committee) at the Portland, Oregon Regional Office (RO),
which denied the veteran's request for waiver of the
recovery of an overpayment of disability compensation
benefits, in the calculated amount of $3,064. By a
memorandum decision of March 1992, the Committee confirmed
the previous denial of the veteran's request for waiver of
the recovery of the overpayment of disability compensation
benefits. The appeal was received at the Board in June
1992.
In November 1993, the Board remanded the case to the RO for
further development. The Committee, in a memorandum
decision of April 1994, confirmed the previous denials of
the veteran's request for waiver of the recovery of an
overpayment of disability compensation benefits. The appeal
was received back at the Board in July 1995.
CONTENTIONS OF APPELLANT ON APPEAL
The veteran contends, in effect, that the overpayment in
question should be waived since he was not at fault in the
creation of the debt; rather, he argues that the overpayment
was created as the result of administrative error. The
veteran states that, at the time of his divorce in September
1985, he first notified the Army Retired Pay Branch; he
indicates that he then called the RO in order to contact the
VA supported insurance company so that he could change the
beneficiary on his insurance policy. The veteran further
states that from his conversation with the counselor at the
RO, he was lead to believe that he had taken all steps
necessary to have his records and the system reflect his
current marital status. The veteran asserts that, since his
contact with the RO, he was under the impression that his
financial records were correct in accordance with his status
and he was being paid accordingly. The veteran argues that
recoupment of the debt would cause him to suffer undue
financial hardship and, therefore, would be against equity
and good conscience.
DECISION OF THE BOARD
The Board, in accordance with the provisions of 38 U.S.C.A.
§ 7104 (West 1991), has reviewed and considered all of the
evidence and material of record in the veteran's claims
file. Based on its review of the relevant evidence in this
matter, and for the following reasons and bases, it is the
decision of the Board that the preponderance of the evidence
is against the claim that the overpayment was created solely
as the result of administrative error. The preponderance of
the evidence is also against the claim for waiver of the
recovery of the overpayment of disability compensation
benefits at issue.
FINDINGS OF FACT
1. The veteran's disability compensation benefits were
reduced by the RO in September 1991, retroactive to October
1, 1995, due to his divorce in September 1985. This action
resulted in an overpayment in the calculated amount of
$3,064.
2. The veteran bears significant fault with respect to the
creation of the overpayment by virtue of his failure to
promptly notify the RO of a change in his dependency status.
3. The VA does not bear sole responsibility for the
creation of the overpayment of disability compensation
benefits in the calculated amount of $3,064, since the RO
did not have actual notice of the September 1985 divorce
until 1991.
4. As the veteran's reported monthly income is adequate to
meet his monthly expenses, recovery of the indebtedness in
question would not cause him undue financial hardship, and
failure to recover the debt would result in his unjust
enrichment.
5. There are no other elements of equity and good
conscience which supports granting the requested waiver to
the veteran.
CONCLUSIONS OF LAW
1. The overpayment of the veteran's disability compensation
benefits was not due solely to administrative error on the
part of the VA. 38 U.S.C.A. §§ 5112(b)(2)(9)(10) (West
1991); 38 C.F.R. §§ 3.500(b), 3.501(d)(1) (1994).
2. Recovery of the overpayment of disability compensation
benefits in the amount of $3,064 would not be against the
principles of equity and good conscience. 38 U.S.C.A. §§
5107, 5302 (West 1991); 38 C.F.R. §§ 1.963, 1.965 (1994).
REASONS AND BASES FOR FINDINGS AND CONCLUSION
Initially, we note that we have found that the veteran's
claim is "well-grounded" within the meaning of 38 U.S.C.A. §
5107(a); effective on and after September 1, 1989. That is,
we find that he has presented a claim which is plausible.
Moreover, after careful review of the evidentiary record, we
are also satisfied that all relevant facts have been
properly developed. Therefore, no further assistance to the
veteran is required to comply with the duty to assist as
mandated by 38 U.S.C.A. § 5107(a).
The pertinent facts in this case are not in dispute and may
be briefly described. By rating action of February 1978,
the veteran was granted service connection for calcific
tendinitis of the right and left shoulders, bilateral high
frequency hearing loss, and residuals hemorrhoidectomy.
Received in December 1978 was a declaration of marital
status which showed that the veteran was married to Mary
Elizabeth in March 1972. Thereafter, by letter dated in
January 1979, the veteran was informed that his award had
been amended to include benefits for a dependent.
By rating action of June 1985, the veteran was granted
service connection for tinnitus. By letter dated later in
June 1985, the veteran was informed that his disability
compensation award had been amended, and included were
additional benefits for his spouse. In that letter, the
veteran was advised that any change in the number or status
of his dependents should be reported promptly to the VA.
Attached to the letter was VA Form 8764, which advised the
veteran that he was required to notify the VA immediately of
any changes in the number or status of his dependents, and
that failure to promptly inform the VA of such changes would
result in the creation of an overpayment in his account.
Received in July 1991 was a letter from the veteran
indicating the he had been divorced from Mary Elizabeth
since September 26, 1985, at which time he notified the Army
Retired Pay Branch and started an allotment for spousal
support. The veteran further indicated that he also called
the VA to find out how to contact his VA sponsored insurance
company; he stated that, upon contacting the insurance
company, he changed the beneficiary on his insurance policy.
The veteran further states that from his conversation with
the counselor at the RO, he was lead to believe that he had
taken all steps necessary to have his records and the system
reflect his current marital status.
Also received in July 1991 was a copy of a divorce decree,
which showed that the veteran and Mary Elizabeth were
divorced on September 26, 1985.
Based upon the above information, by letter dated in
September 1991, the veteran was informed that his award had
been reduced to the rate payable for an unmarried veteran,
effective September 1, 1985. This action resulted in the
creation of an overpayment in the amount of $3,064.
In this case, the veteran maintains that the overpayment of
disability pension benefits was improperly created because
the overpayment resulted solely from error on the part of
the VA. Sole administrative error connotes that the veteran
neither had knowledge of nor should have been aware of the
erroneous award. Further, neither the veteran's actions nor
his failure to act must have contributed to payment pursuant
to the erroneous award. 38 U.S.C.A. § 5112(b)(9)(10); 38
C.F.R. § 3.500(b)(2).
In this regard, we note that the veteran was properly
notified in January 1979 and June 1985 that he was receiving
additional benefits for a dependent spouse. And, while the
veteran indicates that he contacted the RO at the time of
his divorce, there is no evidence of record that the veteran
notified the RO of any change in dependency status.
Further, although the veteran was divorced in September
1985, he continued to accept disability compensation checks
which included a spousal allowance for Mary Elizabeth until
1991. The evidence of record reflects that from September
1985, the erroneous award continued with the veteran's
knowledge. Thus, the evidence fails to support a conclusion
that the overpayment was due solely to error on the part of
the VA.
In a Financial Status Report, dated in October 1991, the
veteran reported that he was divorced. He reported a
combined monthly net income of $1,168.33. He calculated his
monthly expenses to be $1,168, including: $315 for rent,
$150 for food, $80 for utilities and heat, $34 for
telephone, $74 for insurance, $50 for clothing, $33 for
cable, $75 for auto expenses, and $92 for other living
expenses. The veteran reported as assets $50 cash in the
bank, $10 cash on hand, $20 in furniture and household
goods, and a 1973 automobile with a resale value of $400.
The veteran also reported that monthly expenses included
credit installment payments of $265, none of which was
overdue. The veteran also indicated that he was discharged
from bankrupt in 1981.
The applicable law and regulations state that when waiver
has not been precluded due to the finding of fraud,
misrepresentation, or bad faith, the standard of equity and
good conscience is used to determine whether an overpayment
can be waived. 38 U.S.C.A. § 5302; 38 C.F.R. §§ 1.963,
1.965. The phrase "equity and good conscience" means
arriving at a fair decision between the obligor and the
Government. In making this determination, consideration
will be given to various elements which are not intended to
be all inclusive. These elements are the fault of the
debtor where such actions contribute to creation of the
debt, balancing of faults where VA fault is also involved,
whether collection of the debt would cause the debtor undue
financial hardship by depriving him of the basic
necessities, whether collection would defeat the purpose of
the VA benefit, whether failure to make restitution would
result in unjust enrichment and whether reliance on the VA
benefits resulted in relinquishment of a valuable right,
i.e., changing position to one's detriment. 38 C.F.R. §
1.965(a).
For reasons already discussed above, the Board finds that
the veteran was at fault in the creation of the overpayment
in continuing to receive payments for which he was not
entitled. We further find that fault on the part of the VA
played no role in the creation of the overpayment.
With respect to the question of financial hardship, we note
that such a finding would be justified if collection would
deprive the veteran of basic necessities. We note that the
recent financial statement reflects that the veteran's
monthly income is adequate to meet his monthly expenses.
More recent income expense data have not been submitted to
indicate that there has been a material change in his
financial status. The record does not demonstrate that
collection of the debt would deprive the veteran of food,
clothing, shelter and other basic necessities. It is
noteworthy that the veteran is able to meet his other
payments of indebtedness. We note that the indebtedness to
the Government is entitled to the same consideration. We
further note that although the veteran reported being
declared bankrupt in 1981, this determination was reached
prior to the creation of the debt in question and, as such,
it is not affected by said determination.
Moreover, to the extent that the veteran was not entitled to
disability compensation benefits which included a spousal
allowance following his divorce, unjust enrichment would
arise were the debt to be waived. Similarly, the Board
finds that collection of the debt would not defeat the
purpose for which they were intended. There is also no
indication that the veteran relinquished a valuable right or
incurred a legal obligation in reliance on VA benefits.
Consequently, the evidence of record discloses no element of
equity and good conscience which would persuade the Board
that the Government should waive its right to the repayment
of the assessed overpayment for the period beginning
September 1, 1985.
In reaching this decision, the Board has considered the
doctrine of granting the benefit of the doubt to the veteran
but does not find the evidence is approximately balanced
such as to warrant its application. 38 U.S.C.A. § 5107(b).
ORDER
Waiver of the recovery of an overpayment of disability
compensation benefits, in the calculated amount of $3,064,
is denied.
G. H. SHUFELT
Member, Board of Veterans' Appeals
The Board of Veterans' Appeals Administrative Procedures
Improvement Act, Pub. L. No. 103-271, § 6, 108 Stat. 740,
___ (1994), permits a proceeding instituted before the Board
to be assigned to an individual member of the Board for a
determination. This proceeding has been assigned to an
individual member of the Board.
NOTICE OF APPELLATE RIGHTS: Under 38 U.S.C.A. § 7266 (West
1991), a decision of the Board of Veterans' Appeals granting
less than the complete benefit, or benefits, sought on
appeal is appealable to the United States Court of Veterans
Appeals within 120 days from the date of mailing of notice
of the decision, provided that a Notice of Disagreement
concerning an issue which was before the Board was filed
with the agency of original jurisdiction on or after
November 18, 1988. Veterans' Judicial Review Act, Pub. L.
No. 100-687, § 402 (1988). The date which appears on the
face of this decision constitutes the date of mailing and
the copy of this decision which you have received is your
notice of the action taken on your appeal by the Board of
Veterans' Appeals.
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